Rosen gets Senate to pass no tax on tips using unlikely procedural maneuver

The U.S. Senate unexpectedly passed a version of “no tax on tips” — a policy that President Donald Trump touted on the campaign trail in Las Vegas — via unanimous consent on Tuesday after Sen. Jacky Rosen (D-NV) brought the bill to the floor.
Rosen took to the Senate floor to ask the upper chamber to pass the bill — originally authored by Sen. Ted Cruz (R-TX) — on its own using a procedural tool called unanimous consent that requires all 100 senators to agree. Typically used for noncontroversial resolutions and simple requests, unanimous consent is rarely agreed to for more substantive policy.
But remarkably, no Democrats or Republicans objected to the bill — facilitating its swift passage.
House Republicans have included a version of Cruz’s No Tax on Tips Act — which is co-sponsored by both Rosen and Sen. Catherine Cortez Masto (D-NV) — in their spending and tax mega-bill. Although Nevada Democrats support the policy, they are committed to voting against the package given that the tip tax policy is bundled with big cuts to Medicaid and food assistance.
“We shouldn’t be forcing working families to choose between keeping their health care and keeping their tips — which is why we want this bipartisan bill to pass on its own, not [as] part of a harmful, extreme budget bill,” Rosen said on the Senate floor.
Both Rosen and Cruz spoke on the floor in favor of the policy, with Rosen saying that she was “not afraid to embrace a good idea” even if it came from Trump. Trump first proposed ending federal taxation of tips at a Las Vegas campaign rally in June, saying he got the idea from a waitress at his Las Vegas hotel. Rosen and Cortez Masto soon endorsed the idea, as did then-Vice President Kamala Harris.
Cruz noted the remarkability of passing a substantive policy change via unanimous consent, comparing it to miracles in biblical times. And he said the lack of objection from any senator portends near-certain eventual passage of some version of the policy.
“With what we just saw now, the certainty that we will see no tax on tips become the law of the land, I think, is very close to 100 percent,” Cruz said on the Senate floor. “Whether it passes freestanding or as part of the bigger bill, one way or another, no tax on tips is going to become law and give real relief to hard working Americans.”
The bill allows workers in traditionally tipped industries — which is left to the Treasury to define — to claim a 100 percent deduction on their cash tips (which includes those left on credit and debit cards), up to $25,000 per year. The deduction is unavailable to employees earning over $160,000 annually.
The Senate bill has two significant differences from the version that is included in House Republicans’ budget bill. It includes a $25,000 cap, and the deduction would be made a permanent part of the tax code. In the House bill, there is no cap and it would phase out at the end of 2028.
While the Congressional Budget Office has yet to score Cruz’s bill, the temporary no tax on tips proposal in the House Republican budget is projected to cost $40 billion over four years.
About a quarter of Nevada’s workforce is employed in the leisure and hospitality sector, and more than 5 percent of all workers are tipped, according to the Tax Policy Center — the highest percentage of any state.
“This is great news for Nevada,” Rosen said. “Our hospitality and service staff [are] working harder than ever while being squeezed by rising costs, and this bill — it’s not the be all, end all — but it’s going to offer immediate financial relief while the Senate works to lower costs.”